Lehman CEO under scrutiny for investor statements

By Martha Graybow

NEW YORK (Reuters) - Richard Fuld's attempt to reassure investors in Lehman Brothers Holdings Inc just days before it filed the largest-ever U.S. bankruptcy is attracting scrutiny from lawmakers and others examining the company's collapse.

A U.S. House of Representatives panel grilled Fuld, Lehman's chairman and chief executive, on Monday over whether comments he made during a conference call with Wall Street analysts in the investment bank's waning days were deceptive. Fuld testified there was no attempt to mislead anyone.

Legal experts said that under securities laws, criminal cases can be brought if prosecutors have evidence that corporate executives knowingly misled investors in an attempt to defraud them into buying or selling securities. The Securities and Exchange Commission can also bring civil charges.

The FBI is investigating Lehman, Fannie Mae, Freddie Mac, American International Group Inc and other companies hard hit by the mortgage and credit crisis, law enforcement officials have told Reuters.

No charges have been brought against any executive at these firms in connection with the probes.

The U.S. Attorney's Office for the Eastern District of New York is investigating whether Lehman executives misled investors by making upbeat public comments in the September 10 conference call five days before the firm filed for bankruptcy protection, the Wall Street Journal reported Monday, citing people familiar with the investigation.

Robert Nardoza, a spokesman for the U.S, Attorney in Brooklyn, New York, declined to comment on the report. A Lehman spokesman, Nathaniel Garnick, also had no comment.

Legal experts said cases of this kind can be hard to prove, with e-mails documenting fraud or the testimony of cooperating witnesses often key for a successful prosecution.